IBM drops NetPC

The stampede to provide corporate customers with a NetPC thinned out
today as IBM(IBM) decided to drop its version of the product.

In place of the NetPC, a prototype of which the company released in June, IBM will continue to sell its network computer and will ship a traditional desktop computer with a "sealed" A: drive, which the company introduced in March, according to spokesperson Will Runyon. "We are not walking away from the important benefits of the NetPC," he said.

Large companies increasingly are turning to so-called dumbed-down
computers in order to stem the large costs associated with the management of hundreds or thousands of individual PCs. With the NetPC and its cousin the NC (the still-dumber network computer), IS managers can monitor software and
applications from a central server.

Like the NetPC, IBM's "sealed" desktop computer has its own operating
system, but prevents the end user from introducing new software via floppy
disk or CD-ROM. Unlike the NetPC, however, IBM's machine can be "unsealed"
to perform like a traditional PC.

"Our customers are saying, 'Give us the flexibility,'" said Runyon. "And it
makes a lot more sense for us as a manufacturer to develop a product based
on an existing product and just 'seal up' certain features of it."

Runyon estimated that the sealed computer, an extension of the company's
PC 300 PL line, will ship next month at a cost of between $1000 and $1300,
compared to the $800-to-$1000 range for NetPCs.

One computer analyst praised the move as a practical and cost-cutting measure that other vendors will imitate.

"It makes absolute sense," said Martin Reynolds of Dataquest. "You have all the NetPC functionality with regular PC parts. And if you want to turn the NetPC back into a PC, you just put the floppy in."

Reynolds said IBM will be able to lower costs and increase availability by using the standard PC case, motherboard, and power supply. "When production occurs at such volume, any deviation incurs extra cost.

Reynolds also predicted that other vendors will follow in IBM's footsteps, creating a diversified market for corporate computing.

"There will be a small market for the NetPC, others with the option to turn the floppy off, and others with standard motherboard with slightly different case," he said. "We'll see a mix."